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2000-961-Minutes for Meeting October 12,2000 Recorded 10/19/2000VOL: CJ2000 PAGE: 961 RECORDED DOCUMENT STATE OF OREGON COUNTY OF DESCHUTES iiiiiiiiiiiiiiiiiiiiiillillillillillillilliillillilillillilI *02000-961 * Vol -Page Printed: 10/20/2000 10:54:31 DO NOT REMOVE THIS CERTIFICATE (This certificate constitutes a part of the original instrument in accordance with ORS 205.180(2). Removal of this certificate may invalidate this certificate and affect the admissibility of the original instrument into evidence in any legal proceeding.) I hereby certify that the attached instrument was received and duly recorded in Deschutes County records: DATE AND TIME: DOCUMENT TYPE: Oct. 19, 2000; 4:48 p.m. Special Meeting (CJ) NUMBER OF PAGES: 26 MARY SUE PENHOLLOW DESCHUTES COUNTY CLERK KEYP CH D 0 C 2000 MINUTES OF MEETING DESCHUTES COUNTY FAIR BOARD 00 OC i ! P1�: 40 Thursday, October 12, 2000 COUNT Y CLUi'K Deschutes County Fairgrounds Administration Building Present were David Bishop, John Leavitt, Lee Smith and Don Miltenberger, Deschutes County Fair Board (Board member Jim Diegel was unable to attend); Tom DeWolf, Deschutes County Commissioner; Rick Isham, Deschutes County Legal Counsel; and Mike Maier, Deschutes County Administrator. Also attending were Gary Lynch and Bob Green, City of Redmond; Dan Despotopulos, new Interim Manager, Deschutes County Fair and Expo Center; citizen Mike Daly; and several representatives of the media. Chair David Bishop called the meeting of the Deschutes County Fair Board to order at 4:05 p. m. He stated that this is the regular monthly meeting of the Board, and a quorum is present. BISHOP: Most of us probably haven't had a chance to review the minutes of previous meetings and comment for approval. What is the wish of the Board - to approve them now, as presented, or to put them on hold and come back to them at a later time? (The consensus of the Board members was to approve them at a later date) BISHOP: Probably the most exciting news that I've been involved with is lately is having the opportunity to interview a couple of candidates for interim manager. Having met once with Dan Despotopulos, I've found that Dan has tenacity. He does not have first-hand experience with running a fairgrounds or an event center, but again this is an interim situation. Mike (Maier) negotiated terms and conditions with Connie Worrell of Express Personnel Services, who did a background search. It appears he has done some great things in the past, and I think he has the ability to be our point person in the short run to move us forward. Minutes of Regular Meeting Thursday, October 12, 2000 Deschutes County Fair Board Page 1 of 26 Pages (Introductions all around then took place. Mike Maier explained that the contract goes into effect the next morning, Friday, October 13. Dan Despotopulos gave an overview of his experience with the management of various event facilities over the past twenty-eight years.) SMITH: I move that we accept the Commissioners' recommendation. LEAVITT: I second. MILTENBERGER: I call the question. VOTE: Unanimous "ayes ". BISHOP: Officially the Deschutes County Fair Board severed the employer-employee relationship on midnight Monday. MAIER: We met with the employees yesterday morning. We had a very good meeting. Marty Wynne and Jeanine Faria from the County's finance department, along with Connie Worrell and three of her staff attending the meeting, and we signed all the employees up through Express Personnel. We discussed their employment situation, which is interim, until we get some kind of plan going; they will be on contract, and will not see a reduction of their salary. We will maintain their health benefits; however they are not eligible for PERS anymore. We answered a lot of questions, and it was a very productive meeting. BISHOP: I met with Charlie (Brewer), Sam Keyser and Edie Longfellow of the Columbia River Pro Rodeo Circuit Association. They are taking the promotion ball and running with it. Charlie will have an office and phone available to him in the Fairgrounds building. Minutes of Regular Meeting Thursday, October 12, 2000 Deschutes County Fair Board Page 2 of 26 Pages ISHAM: I have advised Charlie and the attorney for the PRCA, who works out of Ellensburg, Washington, that the Fair Board cannot enter into an agreement with them until the other agreement is signed. They understand that. I did prepare two assignment documents for the PRCA contract; I gave them to Ron Nelson (of the Fair Association) this morning. He understands that this is not official until everyone has signed off on it. We have an outline of a substituted contract, giving orderly steps for it to happen. The PRCA's goal is to not lose any money. BISHOP: When it comes to this event, with them taking on the role of promoter, we haven't seen copies of the beer, concession or security contracts, or any OLCC requirements. Do you have a handle on those? ISHAM: I discussed the concessionaire contract with Charlie and their attorney. I told them we are looking at those, but that we can't make any promises. We still need copies of some of the contracts; we have the High Desert Catering and the beer contracts. There are a couple of other, similar contracts that overlap a little. The Pepsi document is only a proposal; I will contact Pepsi and find out if they have an actual contract. If they don't, then I will ask them what their understanding is. I will help Charlie and his group as much as possible in this regard. Many of the contracts, like the one with High Desert Catering, expire on midnight, December 31, 2000. The uncertainty to the Fair Board will be that period between now and December 31. Some contracts go farther into the future. We will need to evaluate these on a case by case basis. SMITH: Tom Collier called; he's president of a Rotary club. Apparently there is a big Rotary convention here next May. He asked a question about the contracts, as they may want to choose their own concessions. I told Tom that this would not jeopardize their ability to hold this event. BISHOP: As a matter of update, Rick provided me with copies of letters from the folks who submitted engineering proposals. I liked the Evans timeline, and hope Hickman Williams will provide the same thing. In our negotiations with Jerry Yeatts (Family Motor Coach Association), the timeline issue is critical to the continuity and the comfort level going forward. Whatever they propose must be absolutely doable. Minutes of Regular Meeting Thursday, October 12, 2000 Deschutes County Fair Board Page 3 of 26 Pages ISHAM: I will ask Hickman Williams for a preliminary budget estimate. They indicated they will immediately fly over and get topographical details on film, since there has been rock and dirt disturbed recently. One of their proposals is to possibly look at larger areas that would be easier to manage in terms of flow in and out. We have discussed a timeline; I don't believe this is going to be a problem. BISHOP: Jerry Yeatts is very sensitive to this. Maybe Dan can get in touch with him in this regard. ISHAM: This is probably not in Dan's scope of work. It should be handled through the County, keeping Dan in the loop. BISHOP: A letter dated September 29 was received from McKennon saying the insurance on the Deschutes County Fair Association had been cancelled. Mike (Maier) gave us a heads -up on the sensitive issues of fire and liability insurance, and that the Association had allowed the insurance to lapse; and he made sure these things were covered. MAIER: We're going to have a little fallout from that. Mike Viegas, our risk manager, is going to meet with Mike McKennon and sort out all the different policies, which I believe have all expired. As you know, the County is self-funded for liability. Maybe this is a unique situation here, with the types of events held; maybe we should have a liability policy, and not run it under the County umbrella of self - funding. Right now, we are going to cover it, but we do have an inland marine policy for fire on the buildings and equipment. We had that bound at 5:00 p.m. before it expired that evening. During the next couple of weeks we will look at all the options, and will keep Dan updated. (A general discussion occurred regarding insurance policies and the different providers.) BISHOP: Today we redrafted the contract and sent it to the FMCA. Minutes of Regular Meeting Thursday, October 12, 2000 Deschutes County Fair Board Page 4 of 26 Pages ISHAM: I did fax them the cost sheet, but I did not provide the labor sheet. Initially the contract provided for labor costs that appear to be scheduled at an hourly rate that the workers would be paid. It was pretty clear from our conversation during a conference call that they are taking those rates as the rates they would pay. Since minimum wage is $6.50 per hour in Oregon, $7.00 could only represent wages and not the other costs above wages. That whole section is taken out. What's now in there is that any labor provided by the Fair Board would be at the Fair Board's cost. There's no markup, as such. At $7.00 per hour, it will be more $11.00 to them. I don't have that schedule yet, and I'm anticipating some good conversation over this issue. It's a huge issue for the way the contract appears to be budgeted. You could lose $30,000 or more on this labor issue, which means that this contract is at best a break-even. After David gave it his blessing, I sent it off that way. I did give him the published rates on the rental of chairs and so forth, which appears to be a little bit better than what the budget was showing. We have the contract pretty well cleaned up, but we need to stand firm on the labor issue. SMITH: I agree. I could not believe the amount quoted in the contract. BISHOP: Perhaps we could send them to a temporary agency and let them make these arrangements on their own. I believe they also have arranged for some of their members to volunteer their labor as well. ISHAM: They are getting a tremendous bargain. There are conflicting clauses with respect to the electrical connections. One section says they have to extend electrical connections at their cost; another says we will provide it for $50.00 per circuit. The information I've seen is that probably it can't be done for $50.00 per circuit. You have to take out a permit; and the facility doesn't have a licensed industrial electrician who can do this. I put in the contract that these extensions would be done at their cost, and took out the $50.00 per circuit. Minutes of Regular Meeting Thursday, October 12, 2000 Deschutes County Fair Board Page 5 of 26 Pages BISHOP: (He passed out copies of an events schedule at this time.) Under the heading of contracts, one of the things that I hope Dan will be able to get a handle on is this schedule (of events) and the contracts that affect this schedule. My understanding is that before we, as an entity, can put on any event that has already been contracted by DCFA, we must have an assignment. ISHAM: There are two different ways to do this. We can accept the assignment and operate the event for what additional consideration is yet to be paid on the contract. On some, that's probably the best way to do it; it's probably the only way to do it with FMCA and PRCA. The other way is to rewrite the contracts, showing the consideration amount as only what remains to be paid. We need to go through the contracts fairly quickly and address this issue. Two basic types of contract forms have been used. The forms are very difficult, and the feedback is that streamlining the contract process should be a high priority, so there is no long relationship to get bogged down and possibly turn negative. Also, the Association in the past did not close out the contract until all of the tables, plates, etc. were accounted for. That's one of the reasons they had this long list of open contracts. BISHOP: Regarding the calendar by the events being held; we also need a calendar shown by terms and conditions of the contracts. We need to match up the terms and the timelines. When there is money due, we need to get it when it is due. We may not know that we are supposed to be invoicing groups far in advance of their event. ISHAM: I have an observation. It takes $1,500 to take dirt out of the arena, and another $1,500 to bring it back in. The schedule of events does not refer to this type of thing, and it costs a lot since this work is not coordinated. Several event operators in the Midwest do not own the dirt; they go to a heavy equipment operator, who puts the dirt in within a few hours, instead of tying up the arena for several days and using your own employees to do the work. Also, the dirt is worth about $50,000, so it's a potential resource. And, particularly in cold winter months, some people trailer their horses in and use the facilities in the off times for exercising them and so on. Minutes of Regular Meeting Deschutes County Fair Board Thursday, October 12, 2000 Page 6 of 26 Pages BISHOP: Other events may be coordinated this way as well, so the conditions of the events meet the event. Since Monday, the outstanding accounts payable continues to grow since the audit. There is $18,000 tied to the Brooks and Dunn concert, George Moore said there was a bill of approximately $4,000 that he hadn't been paid on, another was a contract for a foodserver, who said the audit showed the Association owes him $4,000 but he is actually owed $23,000. There's also a $5,000 overtime claim from an employee who no longer works here. I spoke with the CEO of the Columbia River Bank, and it appears that the DCFA has two credit cards out there with significant outstanding balances. I'm getting about 25 calls a day on this situation. I would like a motion for the Fair Board to go forward to step completely out of the negotiations between the Fair Association, the Fair Board and the County regarding indebtedness, the credit cards, the bad checks and the money due. Quite frankly, the Fair Board does not have any money. We've been forthright in trying to negotiate and assume those debts, but we have not been able to come to an agreement. I'd like to encourage us to step aside and let the Board of County Commissioners and Legal Counsel work this out. MILTENBERGER: In other words, you would rather have people contact the County instead of the Board members. SMITH: I would not feel comfortable trying to determine whether someone is owed $4,000 or $23,000. ISHAM: One of the things that the Board of County Commissioners feels, due to the uncertainty and the changes in the bills coming in, is that they need a complete listing on the assumption contract. In the absence of that, there is no way to quantify the magnitude of that part of the contract. It's probably going to take considerable effort and a little time to have that list be as accurate as possible. The other complicating fact is that Chad Loomis put together the original list, but recently was killed in a car accident. MILTENBERGER: Can't a notice be put in the paper asking for people to step forward if they are owed money? Minutes of Regular Meeting Thursday, October 12, 2000 Deschutes County Fair Board Page 7 of 26 Pages ISHAM: I don't know that we want everyone coming out of the woodwork. DEWOLF: The thing that would help as a part of this motion would be the authority, in this particular scope of work, to act in the Fair Board's behalf. I still want to be very clear about the chain here that would be established. The County is appointing a Fair Board; the Fair Board is contracting for the operation of the facility. I am uncomfortable in skirting that, as I'd like the precedent to not only be set, but to be adhered to, that in respect to this particular set of circumstances, you are offering the authority, and perhaps even with your review, to negotiate. MAIER: We're going to need a lot of support from your staff in verifying some of these things. It's a team effort in trying to figure out what it actually is. DEWOLF: I would appreciate the ability to just have our staff do the research necessary to verify what it is. I am frustrated because the numbers are all over the place. There's no way to quantify anything. I know that the more we focus in on this, the clearer the picture will be, and that in thirty days it will be a whole lot better than right now. I would hope that within 60 or 90 days we would have this behind us. It's clearly not what I thought it was a week ago. It would be helpful for you to delegate that authority, for us to be able to let our staff do their work. MILTENBERGER: I so move. SMITH: I second. VOTE: Unanimous "ayes ". DEWOLF: Next Tuesday, October 17, at 9 a.m., the budget committee will be meeting in a work session to discuss a supplemental budget. I'm not going to make a proposal per se, but what I am doing, working with Mike (Maier) and Susan (Mayea) and Marty (Wynne) is presenting a host of options. Minutes of Regular Meeting Thursday, October 12, 2000 Deschutes County Fair Board Page 8 of 26 Pages DEWOLF: We've had two meetings so far, and I'm very frustrated in trying to put this together. One piece is strictly related to construction for the parking lot. After we have this meeting, we'll have a clearer idea of the general scope. What I'm looking for is worse case scenario; I want the biggest number that we might possibly face. When we have volunteers come in to help with excavation, and have the National Guard come in, we can lower it from there. I have to build a budget that is worse case. That's one piece of it. The other side of it is operations. What's frustrating is not having a number to work with, because it's shifting so much. I'm fielding a lot of calls on their past due bills and contracts. We're trying our best to deal with them all, but there are some pretty angry folks out there. The Fair Board is not only invited, but we would encourage you to attend if at all possible. Lee (Smith) sits on the budget committee, which I really appreciate. This is going to have a big impact on our budget that we were not prepared for. I'm frustrated, and I am not going to make a proposal. What I'm going to present to the budget committee are about three or four different options, and we'll just have to stew about them for a while. First, we need to allow this process to carry forward, so we have a better picture of what we're looking at for both the parking lot situation and the operations part. Secondly, we need to get past the November 7 election. We can't propose a supplemental budget yet, because if Sizemore is successful on his bills, we're in a world of hurt at that point. Tuesday we will kind of get our ideas on the table, and can reflect on the information until after the election. MAIER: We also have the other fund that we talked about, the Fair fund. DEWOLF: We have a construction budget because of the construction that has already taken place. We're just going to reactivate that as the construction budget forever, as there will be other things besides the parking lot in the future. Secondly, there is going to be a budget for the overall grounds on an ongoing, yearly basis. There will be a third budget created specifically for the Fair itself, as an event, because it's obviously the biggest and the most pivotal event every year. Minutes of Regular Meeting Thursday, October 12, 2000 Deschutes County Fair Board Page 9 of 26 Pages ISHAM: When going through the files, I noticed that there were a number of Fair grants from the Department of Agriculture that should have gone through the County. These appear to have gone to the Fair Association and were expended. Those grants, about $40,000 to $50,000 a year, are specifically for running the Fair. I am surprised these weren't run through the County budget. DEWOLF: I have had conversations with Greg Lynch (attorney for the Fair Association) over the past week. There is a feeling among some people that running things through the County budget process is some kind of retribution or punishment. I pointed out to Greg that what this does is protect everyone - the Fair Association directors, the County, the Fair Board, the facility, and the taxpayers. We create reserve funds for maintenance; we'll have carryover funds for when money is short; we have contingencies for emergencies. Everything is budgeted with a particular line item so that we know how much payroll or anything else will be; if that is exceeded, we know it and it's caught early on. It puts in the kinds of checks and balances that will prevent what's happened in the past from happening again. We're getting ready to potentially use general fund dollars to bail out this situation. I would insist, as budget officer, that those funds be repaid to the general fund. This is an impact on our ability to provide all the other services that the County provides. The goal is to get everyone healthy again, and to get everyone protected by having a real solid, sound process. SMITH: I am surprised that there is resistance. DEWOLF: I'm not sure that there is at this point, but there certainly has been. A couple of weeks ago they were saying they were willing to go through our budget process for a year or two only. My belief is that this facility belongs to all the taxpayers, and that we ought to protect this from now on in this way. It is a very sound way to do business. We can do additions and changes when necessary. My vote will always be to maintain these kinds of fiscal controls so we're all protected from now on. BISHOP: We will support what you need to do in this process. Minutes of Regular Meeting Thursday, October 12, 2000 Deschutes County Fair Board Page 10 of 26 Pages DEWOLF: In the future, for next year's budget, you will be presenting your budget to us. Our finance people can help you create your budget. MAIER: We're hooking you up right now into our system. These will be good management tools for your cost accounting and cost centers. We will need the input of the Fair Board, as the supplemental budget will operate the Fairgrounds until June 30, 2001. SMITH: Does this allocate indirect costs? MAIER: Yes. One good thing has happened. This morning we met with the City of Redmond, and they have agreed to waive the outstanding water bill in the amount of about $1,200. We thank them for this. BISHOP: (He handed out the County Counsel's summary of Draft 44, put together after Tuesday night's meeting.) This is the fifth time we have agreed to deadlines with the Fair Association in working out things on the assumption and termination agreements. They have still not signed, although they say in spirit they agree with them. We can't move forward with agreements that aren't executed; agreements in principle don't cut it. All bets are off on this now. The ball is in their court. I am disappointed, because there is nobody else better to operate the Deschutes County Fair than the Deschutes County Fair Association. DEWOLF: Part of the reason we don't have a signed agreement is we added a great scope of work here due to the additional bills coming in. You're absolutely right, though, the ball is in their court. BISHOP: I don't think any new terms and conditions in here at the last moment changed anything. I believe they passed the motion that agrees to the written agreement here in substance and spirit - or whatever their exact words were. So that didn't create any hurdles from what their motion was. Minutes of Regular Meeting Thursday, October 12, 2000 Deschutes County Fair Board Page 11 of 26 Pages BISHOP: The hurdle is, and continues to be, that they are not willing to produce a viable working plan, and that they want a long-term commitment to putting on the Fair. Well, we have been willing to allow them to put the Fair on next year, but they haven't been responsible in stepping up to the plate to say that they would put the plans together. It's very difficult when this Board, over about a week and half, received promises from Greg Lynch, their attorney, to author these agreements. Almost a week later we had not authored anything. Fortunately County Counsel picked up the ball and authored these agreements. It's very difficult to move forward with any consensus or agreement with the kind of posture that they are being advised to take. That being said, I'm not convinced that they have the ability to meet the requirements that we've asked of them. I hope I'm wrong. To that end, my recommendation to this Board is to ask that Rick, County Counsel, start a request for proposal process so we can identify other fair operators in the event that DCFA is unable to come to grips with what the requests from this Board are. Hopefully it would be a backup plan; hopefully it's all for naught. But here we are in the middle of October, and things start to heat up, and we can't wait. I would encourage us to ask County Counsel to move forward and help us identify an RFP, because there are other entities out there that have called me this week. I've heard from past Fair Board members, past Fair Board presidents, and other service clubs in the region that would be willing to entertain doing this. Again, there isn't a better entity than the Fair Association to put it on. But they have to come to terms of the businesslike requests being asked of them. I understand that they have had a free rein and a cavalier management style, but it has financially bankrupted them. For us to give an ounce of time or money to that kind of continued effort is irresponsible. We need a backup plan. No matter what happens, we will have a Fair. It would be sad for the Association for the first time in its existence to have the ability to put a Fair on for one month, and not have the burden of eleven other months of operation and overhead, and not do so. I don't think another entity could be as profitable as the Fair Association, and it should be phenomenally successful. MILTENBERGER: If another entity puts on the Fair, would they expect to make a profit? Minutes of Regular Meeting Thursday, October 12, 2000 Deschutes County Fair Board Page 12 of 26 Pages BISHOP: Good question. I can tell you that the past Board members and officers of the Fair Association would put it right back into the facility. That's what they shared with me. I think there may be a loss of focus as to whose Fair this is. It's not the Fair Association's, it's not the Fair Board's, nor the County Commissioners' - it is a community event. I think some of us have lost focus as to what we're doing and why we're doing it. It's bigger than any one of us personally, and it's bigger than any one of our organizations. DEWOLF: I would suggest that for the next few years, we're not looking at having any profit, as it is will have to go into paying back what's been put in. Maybe it's two years; maybe it's ten. Certainly this coming year there won't be any profits to discuss. In my opinion it is prudent to have a backup plan like that. Maybe we can get some assistance from Ron (Nelson) and Mike Schiel (Deschutes County Fair Association) to back us up from Fair date as to what things take place in advance. I'm also aware that I can't continue to ask Rick to do the work he has been doing at the level he has been doing it. To add this RFP to the workload that will certainly continue for the next month would be too much to ask. ISHAM: The Oregon Fair Association in Salem may be a resource. Most Fair Boards in Oregon are members. They have an annual convention, and they do things like sharing equipment. This might be worth checking out. DAN: I will look into this. MILTENBERGER: I am familiar with the Oregon Fair Association convention, which I think is held in mid -winter. MAIER: I found in doing my research on other fairs, that it appears all of them are in trouble. Sometimes they call us and ask us for advice. DAN: There are trade publications; and there is also an annual trade show and conference in Atlanta. I will look into it. Minutes of Regular Meeting Thursday, October 12, 2000 Deschutes County Fair Board Page 13 of 26 Pages SMITH: I sat in on a Fair Board meeting Monday, at which it was decided that Tuesday at 7:00 p.m. was the absolute deadline for signed agreements. Here it is Thursday, and we're still discussing the same issues, and we still don't have signed agreements. I went into this thing with an open mind, but I am beginning to feel that they do not understand the situation. I am losing all confidence in their ability to put on the Fair. I still think that they believe that they are in control of the Fairgrounds - that it's their God-given right, and that this Fair Board will have to agree to that right or they won't sign a contract. I'm at the end of my patience. BISHOP: Me, too. They appear to not get it in the negotiations strategy. Keep in mind Tuesday night at 7:00 p.m. was the fifth time that we agreed with them, and they with us, that it would be done, agreed to and signed. Again, they don't sign it, and instead come back to us with conditions. Their conditions, relayed to me via their attorney, came at about 4:00 p.m. that afternoon - conditions that had never been on the table before. It just never ends. I'm convinced they are the best operator for the Fair; I am absolutely not convinced that they understand where they are in the negotiation process. They are not negotiating from a position of strength. They have nothing to bring to the table, other than a long-term history and a great commitment to put on the Fair from a volunteer resource standpoint. We must try to preserve that, but I am not convinced that we can. DEWOLF: Let's take a step back for a moment and look at where we're at. This facility is, as of yesterday, being operated by the Fair Board with the County's assistance. That is done, and we've crossed that hurdle. The ball is in their court. If this agreement were to never be signed, it's not going to change the long-term, ongoing operation of this facility and the fact that there will be a Fair next summer. We need to recognize this. When they are willing to sign the agreement, that will relieve a lot of burden from them, too. We'll be prepared, budget -wise. SMITH: I don't know where the resistance is coming from. I don't know all of the people involved in it. To raise my confidence level, they need to look at their internal membership and leadership, and the operation of the Association. Maybe they need to reconstitute the Association and perhaps remove the stumbling blocks. Minutes of Regular Meeting Thursday, October 12, 2000 Deschutes County Fair Board Page 14 of 26 Pages MILTENBERGER: One of the things that is probably holding them back is that they have around 300 stockholders. There are fifteen members on the Fair Board, but until they have a stockholders' meeting, I don't know how much they can do. BISHOP: I don't either, but you would think that their attorney would have identified that necessity by this time and advised our attorney that this was a problem. Instead, every time we've come up with a deadline, either Greg Lynch hasn't prepared the agreement like he promised, or they've just ignored it, or they've canceled their meeting. The original deadline to our commitment was 3:00 p.m. Tuesday, but we felt it would be prudent to make the deadline 7:00 p.m. They didn't even schedule their meeting to start until 7:00 p.m. They have no regard for what we think is important. DEWOLF: There's a definite difference of perception. I was very disappointed with the comments from Greg Lynch that I read in the newspaper. He said that the Fair Board and the Commissioners share in the responsibility for not having a business plan and an operational budget in place. In fact we provided the people, we paid for them; and we offered to provide the necessary resources for the past year and a half; and it's been rejected every step of the way. It may well be that their attorney does not understand the history that has taken place here. It is frustrating and is simply not true. I believe we've done everything that we have been legally allowed to do, as well as morally allowed to do, in offers of help with resources. That aside, I can't worry about whether the Fair Association ultimately signs this agreement. If they do, I stand ready to work with them; if they choose not to, then it's between them and their attorney and their creditors. If they don't sign, they don't operate the Fair. ISHAM: To try to deal with all of the issues is difficult. The original conditions were the operations plan and the budget. Even trying to deal with these general conditions has been difficult. Ultimately the hang-up was the operation of the Fair. It was a one-year deal, and the implied agreement was that if they do a good job, they would do it the next year, and so forth. They want a long-term commitment, without conditions. It got way too complicated. Minutes of Regular Meeting Thursday, October 12, 2000 Deschutes County Fair Board Page 15 of 26 Pages BISHOP: I was disallowed to attend that meeting. I think the words that Ron Nelson quoted to me were subject to an approved license agreement. I took that to mean that there would be some agreement, and that we would have the ability to direct what they can do. The license agreement and the operational plan and a budget are likely in the way. None of us have the ability to create a financial plan until we get an auditor in here to go back and reconstruct. There is no one better than them to create an operational plan. It's a two-way street. They are putting conditions on us by requesting an appropriate licensing agreement. There's a lot to do to get to that point. Do you think the creditors are going to sit still until that can happen? I don't think so. DEWOLF: In my opinion, I think those creditors will force their hand. They will be patient for only so long. The ball is in the DCFA's court. MAIER: We need to work with the creditors to establish and maintain a relationship. We'll need to work with them in the future. We need to tell them to pressure the Fair Association, and we need your help. BISHOP: There are a lot of businesses that need their money. The continued dodging of this agreement only delays that process. I feel some continued concern for these vendors in the community. When we get our tailed jerked around and negotiation provisions delayed, or new issues brought up at the last minute, it's very frustrating. This is a community problem. The Association's guidance has not been wise. The ball is in their court, all deals are off until they come back to see us. We have a backup plan. They have been wasting our time, and they have no regard. DALY: I agree with Tom; what is the hurry? You have an interim manager, and budget plans are in place. You can't negotiate by putting feet to the fire. Angry people make bad decisions. Maybe we need to get some mediation or an outside person to come in - have you considered that? I think the stockholders have to get together and give their input. Minutes of Regular Meeting Thursday, October 12, 2000 Deschutes County Fair Board Page 16 of 26 Pages DEWOLF: There's no time pressure on this group, and it's out of our control. If they were serious about needing to meet with the stockholders, they would have met by now. I don't know the organization well enough to understand fully how they operate. The main thing is there's no holding anybody's feet to the fire here that I can see. If in fact DCFA wants to get these bills paid, they have to sign the agreement. If that is holding somebody's feet to the fire, then I'll plead guilty to that. I'm not going to take over responsibility for those debts without the agreement being signed. DALY: I agree, Tom. Like I said, I think we've got some hard feelings here that need to be mitigated someway. People do not negotiate well when they're being forced. DEWOLF: What I'm trying to say is that I'm pretty much done negotiating. We've got our best offer on the table and it's either going to be signed or not. I'm not putting any pressure on them one way or another. I know Connie Worrell will begin to put a great deal of pressure on in very short order, as she can't absorb that kind of a loss. She could sue the DCFA. DALY: They have no assets. DEWOLF: You said they have $3 million dollars worth. DALY: They have no assets other than what they were going to give to you. I agree these bills need to be paid. I really think that if you had an outside mediator it would help. Angry people make bad decisions. DEWOLF: That's another point. That's why I have Rick Isham, because he doesn't get angry, he just gets his job done. The rest of us get emotional. Rick puts together really fine work, and he's thoughtful and calm. Minutes of Regular Meeting Thursday, October 12, 2000 Deschutes County Fair Board Page 17 of 26 Pages DALY: I worked for a law firm for three years. I know how lawyers operate. Rick and the other attorney could probably get together and calmly get this resolved. You have to give them some time, as lawyers work very slowly. BISHOP: Let me share with you a couple of things. I totally disagree with you. There is a hurry. There are these payables. We want to recommend to the Commissioners that they make good on these bills. If you don't think so, I'll forward the accounts payables requests to you if there's no hurry. Secondly, in the month of August, probably one of the first Fair Board meetings that John and Lee came to, I asked in at least two Fair Board meetings that we have a facilitated meeting between this Board and the DCFA Board. Twice - to the point where we had a date scheduled, where Jim Diegel from CODH offered to pay for the facilitator and the Fair Association canceled the dates. DALY: Now is the time to get the facilitator, because you have some agreements on the table. BISHOP: As far as I'm concerned, for this Board, all deals are off. DALY: With that attitude, you're never going to get it resolved. BISHOP: You talk about holding people's feet to the fire. During the two week period, having meetings scheduled and five times agreed upon by both parties, and five times reneged upon by one party, is not exactly my idea of holding people's feet to the fire. First of all, if you don't agree to something, don't agree to it. But they did it five times. That's not holding their feet to the fire. I disagree with you. There is a sense of urgency, but we've all agreed as we've moved down this timeline, and they continue to delay. BISHOP: The other thing I'd like to say is that I've heard figures of from $3 million to $5 million worth of assets have been put in by the DCFA. The County Commissioners almost take the position of a quasi -bankruptcy trustee. Minutes of Regular Meeting Thursday, October 12, 2000 Deschutes County Fair Board Page 18 of 26 Pages BISHOP: Do you realize that if three of those creditors that are owed money by DCFA get together, they can force the DCFA into bankruptcy? Do I think that they are going to get one cent to the dollar if it goes to liquidation? If DCFA wants to put their assets up for sale, they should do so. What is it going to be? I think it is going to be a fraction. So everyone's inflated numbers and in-kind contributions gets it up to that $3 million. Ask them to get copies of checks. It isn't anywhere near $3 million, but you, in good faith, have been told something by somebody that's manipulated information, and isn't accurate. The Fair Association, as Don said, needs to have approval from its shareholders to move forward and ratify any agreement. I will be the last one to know about that. I sat next to their former Fair Board attorney recently, and he made the comment that they must have the approval of the membership. At a minimum, wouldn't that be a negotiable item to put into the timeline at this late date? Should their attorney not have identified that as a prerequisite? You used that as an excuse to delay this. Any delay in this process also delays the ability for our communities' citizens who have in good faith supported their efforts. We've been as accommodating as we can possibly be. SMITH: I wear two hats here. I'm a member of the budget committee also. We will have to take money from other County departments to allocate this. The only authority for the County to do so is in the assumption agreement that the Fair Association will not sign. As of next Tuesday, if that document is not signed, the County has no authority whatsoever to recommend that any funds be transferred to cover those outstanding bills. This is a simple fact. DALY: I still say that you the problem could be that have attorneys involved. The Association is following its attorney's advice. If there's a holdup anywhere, it's the attorneys. You can't blame the Association people for following their attorney's advice. What's the big hurry? BISHOP: Mike, you're a candidate for office. Can I give the creditors your phone number? DEWOLF: This is probably not going to get us anywhere. Minutes of Regular Meeting Thursday, October 12, 2000 Deschutes County Fair Board Page 19 of 26 Pages SMITH: I have a question. If Greg Lynch gets paid by the hour, and the Fair Association has no money, is the County going to get presented with a big bill for his time? BISHOP: Everybody on this Board, and almost everyone on the DCFA Board, are unpaid volunteers, with the exception of Elton. Who is the one individual in this whole process who stands to financially benefit from delay tactics and misunderstandings? It's pretty clear. Especially if the County is expected to pay the bill. DEWOLF: Mike, one of the difficulties is that you are a candidate, and you are getting quoted a lot by the press. That's a problem, too. You say things, we respond to it like anyone who's attacked would. DALY: I don't think I'm attacking you. DEWOLF: As I recall, I got spanked a little bit in Sisters. We all might get angrier talking here, but it's not going to resolve anything. DALY: Angry people make bad mistakes. DEWOLF: I'm heard that ten times today. The reality is that this agreement is out there, and it's out there in good faith. We're operating in good faith, and the DCFA can come forward to run the Fair next year and put together what they need to provide, and we will help them with the resources to put together the budget and the plan. I've never broken faith; I've never done anything untrustworthy towards DCFA. They can trust me that this will work out. They need to choose to do their part. GREEN: I have been told that perception is reality. There is a perception out there among the citizens that this is a power struggle. The newspaper reports trouble me. Regarding the parking lot work, it's almost like we spend as much money as possible, and prefer not to use volunteers on the construction project, and instead pay big contractors. Minutes of Regular Meeting Thursday, October 12, 2000 Deschutes County Fair Board Page 20 of 26 Pages DEWOLF: I received a letter stating that the volunteers have been contacted. That's a huge piece of this FMCA thing. We hope to keep the costs down, and the goal is to use volunteers whenever possible, since there is a big impact to the County's departments and other community groups. We don't want to spend one penny of this money that we don't absolutely have to. GREEN: I am disappointed that the feeling of the Commissioners is that volunteers don't qualify for paid work. DEWOLF: The perception that was there is that if we are going to pay anything, we ought to pay some of those folks for the work that was done on the 22 acres. (A general discussion took place regarding the contributions of volunteers.) GREEN: Are the Fair Association appointees not making any progress? Obviously one of them should be here. Is their attorney recommending that they stay away? BISHOP: I don't think he has lifted the gag order. He gave all of the Fair Association board members a gag order, with the exception of Ron Nelson and Mike Schiel. Ron and I talked several times a day last week; we haven't talked now since Tuesday night at about 8:30. ISHAM: I spoke with Ron today. In order to figure out the finances, the Fair Board and the County need access to confidential creditor information. We need a release from the Association to access this information and have it released by the creditors. We don't have as good a standing without that, and some creditors will not talk to us. Also, to renegotiate some of the pending contracts, like with the PRCA, we need a release. Others relate to the catering operations. Without closure, there is a great deal of uncertainty. Contracts will continue; and sub -contractors and other linked contracts are a challenge. We can't negotiate these until they assigned to us. We don't have the right to interfere with the contracts of the Association. It's one step at a time now, Bob. Minutes of Regular Meeting Thursday, October 12, 2000 Deschutes County Fair Board Page 21 of 26 Pages GREEN: There appears to be very little effective dialog with the other attorney. You are both dealing with volunteers with a different perception. It almost seems like you need a separate entity to resolve these issues. This group doesn't want to ostracize the other. ISHAM: I don't know anything about running the Fair. Greg Lynch doesn't either. Mike Schiel and Ron Nelson have much more information, and should be able to put together a proposal of what's needed to do the Fair. I hope there is a plan there. BISHOP: There are two operating bodies, one that is businesslike and one that isn't. Perception equals reality. If anyone feels we're totally wrong, they should call. We never felt we shouldn't utilize volunteers - but we feel that way for the community, not the DCFA. They don't have a contractual authority to get grants. I heard an amount of $400,000 since last September. Since then, the work of the volunteers and the National Guard has not been factored in, and the number is still at $400,000. Somewhere the mark has been missed. I've also heard $800,000. We need to appeal to the OEDD, but we need to know how much money." Can we say for sure that the volunteers will do a specific amount of work? It's not that we need to do a Davis Bacon project; we just need to know the worse case. I'm sorry if this has been misinterpreted. There is no need to price the volunteer work into the project. We will benefit right off the top, so we will apply for the highest amount possible. GREEN: I agree; you need to look at the worse case scenario. Greg Lynch did not spell it out that way to the press. BISHOP: There is one entity in the group that has been forthright - this Board. I can't say that about the Fair Association, the County or the City. We're in the middle, wanting to do what's right in a businesslike fashion, and we are asking the Association to do the same. Minutes of Regular Meeting Thursday, October 12, 2000 Deschutes County Fair Board Page 22 of 26 Pages DALY: Forcing things won't do it. BISHOP: I've offered to attend their meetings to be a resource, and I have been specifically un -invited. They have an open invitation to attend any and all of our meetings. SMITH: In reading the ORS, the Fair Board has authority and is required by law to meet as a pubic body. None of that applies to the Association. When I think back on what the Fair Board is required to do by statute, we can't negotiate away from those responsibilities. Past Fair Boards may have done that, but as long as I'm on the Board I'm going to use those statutes as my governing documents. GREEN: The volunteer group has some responsibility. I have a little better sense of what's going on now. I am disappointed that the Association is not here tonight. BISHOP: I wish they would invite us to their meetings. They are making their meetings a closed -door event. They are making this an "us versus them" situation. Many have lost their focus as to whose Fair it really is. DALY: At their meeting the other night, they talked about the budget. What I heard was that they already had it pretty well put together. My impression was that it's not that far away. BISHOP: Two days ago? We talked about this with Elton on September 17. It's been going on for a long time. DEWOLF: We tried to help them with a budget a year and a half ago, Mike. I cannot accept that, and I'll tell you why. If I was married to my wife for 50 years, and on our 501h anniversary I smacked her upside the head with a board, the previous 49 years would not erase what I just did. That's a fact. Minutes of Regular Meeting Thursday, October 12, 2000 Deschutes County Fair Board Page 23 of 26 Pages DEWOLF: There's nothing I can do to erase that a year and a half ago we offered all of our resources to help - finance, operational plans - but instead of accepting our help, we were told "no", we don't need your help, we don't need your money. This was told to us repeatedly, in public meetings and in private meetings; they told us they didn't want our help and for us to stay out of this. Now, when we say this is what we can do in order to make this thing move forward, you come to County Commission meetings and these kinds of meetings, and talk to the press, and tell us that we should have been doing all these things in the past. We paid $6,800 to Elton's former budget director from the school district to help get the Fair Association's books straightened out. We did not get one piece of paper to document anything, because he couldn't get it done; that was because they didn't have what you're saying they now indicate is no problem to put together. They don't have it, Mike, and if you're not going to face that, there's nothing I can do to help you there. DALY: I'm just saying what I heard at the meeting the other night. They said they felt that they would go forward. DEWOLF: The reason that I don't accept what you're saying about the past year and a half is that the past year and a half is what brought us to today. Understand and accept that the capacity is just not there to put together the financials that need to be put together. They can't do it. They've shown that to us for a year and a half. It will be done now, and we can help them if they are willing to come to the table. We will help them, and we will get through this. and everything's going to be fantastic. But you're being counterproductive and aren't helping. That's from my heart, I mean that. We need to get beyond this, and right now we aren't getting movement from the Fair Association. We will. We're not forcing them; their creditors will force them. That's just the way it is, Mike. It's not holding feet to the fire, it's not trying to be aggressive, it's not trying to be a dictator, it's just the facts. I've done what I can do within my statutory responsibilities, and I feel comfortable representing all of the citizens of the County. The members of the Fair Board, I believe, are doing what they feel they are statutorily responsible for as well. We can't go beyond this. Minutes of Regular Meeting Thursday, October 12, 2000 Deschutes County Fair Board Page 24 of 26 Pages DEWOLF: I don't need a mediator to tell me that I need to have an assignment before I'm going to accept a contract. I don't need a mediator for that. It's a matter of good, business sense. That's how we're moving forward. I've got absolutely no animosity towards the vast majority of people in the Fair Association. We want to move forward. Do I believe they have gotten bad advice? Yes, I do. Do I believe they are making some mistakes now? Yes, I do. And I'm sure they believe that I am making some mistakes. I'm going forward the best I can, Mike, and I wish that we weren't having this conversation, as it may show up in the newspaper. But that's okay with me, too. I work in the light of day, in public. What you say is counterproductive and it makes it more difficult for us all to get where we need to go. DALY: I don't think I've said anything except to step back and take a look at things, and let things cool down a little bit. Angry people make bad decisions. BISHOP: I'll tell you what it is, Mike. You and I have had open dialog since about April of last year. You have chosen not to listen to the facts and not to see the public, printed documents that I offered to you and anybody else who wants to review them. It makes a big difference. Have you read the termination and assumption agreement? DALY: Yes. BISHOP: Do you think it is unreasonable? DALY: No. In fact, they don't think it's unreasonable, subject to some other things. DEWOLF: The one thing it is subject to is an agreement on a license for the Fair next year. That is not going to happen any time soon. The bills being due is now. They have got to trust that this Board and this Board want them to run the Fair, and will work with them and will make our resources available to them. That is what we want. If they are going to wait until these license negotiations are done to sign this agreement, they are going to be forced into bankruptcy by their creditors. That's my point. Minutes of Regular Meeting Deschutes County Fair Board Thursday, October 12, 2000 Page 25 of 26 Pages DALY: Well, if that's your stance. You have to live with whatever you do. Time will tell if you are doing the right thing. DEWOLF: That's not my stance; it's a fact. BISHOP: Unfortunately, Mike, if you want to sit on the sidelines and not take objectively the information that is available to you, you become a Monday morning quarterback, saying, "see, you should have done it another way". We are doing the best we can. This Board and the County have offered to help time after time, and have been denied. Do you think if the Association has been irresponsible all this time, should we take public funds, Commissioner Candidate, and give it to someone and let them move forward, and make their mistakes twice? In the first round of these negotiations, they were demanding not only to cover their debts - they wanted a half a million dollars in cash up front. Now, if that's not giving the drunken sailor another jug of whisky, I don't know what it is. Chair David Bishop adjourned the meeting at 6.•45 p.m. Respectfully Submitted, Bonnie Baker Acting Recording Secretary Minutes of Regular Meeting Thursday, October 12, 2000 Deschutes County Fair Board Page 26 of 26 Pages